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Near-term upstream investment slashed by US$370 billion since oil price fall

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10 May 2016

Near-term upstream investment slashed by US$370 billion since oil price fall

Report summary

It is two years since the dramatic fall in oil prices, and the impact on upstream development investment has been enormous. Since Q4 2014, we have removed US$370 billion (30%) of capital expenditure across 2016 and 2017. Looking further out to 2020, the number is approaching double that. The deepest cuts are in Lower 48, where capital investment has halved in 2016-17, falling by US$125 billion since 2014. The Middle East has generally been less impacted - with no drop in Saudi Arabian investments in 2016/17.

Table of contents

  • Deepwater investment plunges by nearly 40%
  • Oil sands – high breakevens prompt spend reduction by a quarter
    • Percentage capex reductions by theme from Q4 2014 dataset to Q2 2016 dataset
  • Russia and the Caspian region – rouble depreciation and mega-project delays
  • Middle East and North Africa proving more robust
    • Percentage total capex changes by region from Q4 2014 dataset to Q2 2016 dataset
  • Cost deflation is the key to new investment
    • Drop in forecast US Lower 48 liquids and gas production by year since Q2 2014
    • Drop off in Pre-FID conventional greenfield projects total production by year since Q4 2014*
  • Outlook

Tables and charts

This report includes 4 images and tables including:

  • Near-term upstream investment slashed by US$370 billion since oil price fall: Image 2
  • Near-term upstream investment slashed by US$370 billion since oil price fall: Image 3
  • Near-term upstream investment slashed by US$370 billion since oil price fall: Image 4
  • Near-term upstream investment slashed by US$370 billion since oil price fall: Image 5

What's included

This report contains:

  • Document

    16 5 Global capex data by region.xls

    XLS 48.50 KB

  • Document

    Near-term upstream investment slashed by US$370 billion since oil price fall

    PDF 364.67 KB

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    Near-term upstream investment slashed by US$370 billion since oil price fall

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  • Document

    16 05 Near-term upstream investment slashed by US$370 billion since oil price fall.pdf

    PDF 952.13 KB